Midlands councils join up in £400m deal

11 Oct 01
Milton Keynes Council and Northamptonshire County Council were this week pushing the boundaries of strategic partnerships after agreeing a short-list of private companies to merge their support services in a £400m deal.

12 October 2001

The ground-breaking contract would see a private company providing a plethora of services including finance, legal, housing, benefits, education, information technology and public access such as one-stop-shops for both councils.

The deal could be the biggest strategic partnership in local government history with a potential value of more than £40m per year for ten years.

It would involve more than 800 staff.

It would also cross structural and political boundaries with the first such partnership between a unitary and county authority, and between a Labour-led and a hung authority. Peter Gould, chief executive of Northamptonshire, said it made 'logical sense' for both authorities to work together, but conceded that it was challenging and would be difficult for many councils to contemplate.

'Jointly, we are more attractive to the market and can expect bigger benefits,' he told Public Finance. 'We will be looking at making savings and gaining significant investment. But fundamentally this is about service improvement.'

Gould said it was difficult to place a figure on expected savings but it could be between 5% and 10% over that achieved by a single council.

The deal, far outstripping the partnerships already signed in Lincolnshire and Middlesbrough, could effectively create a super-council eventually capable of delivering services for a number of neighbouring local authorities. 'We don't expect any job losses,' Gould said. 'We want the potential to grow the partnership and develop services for others.

'We want to challenge the imagination. There is more potential in two councils than will ever be in a single council.'

Four companies have been shortlisted by the authorities and are thought to include those already operating strategic partnerships, such as Hyder Business Services.

The companies will now be given several months to put proposals together. Mike Hood, assistant treasurer at Milton Keynes, said both authorities remained flexible and if the final proposals included more services, they would consider expanding the deal.


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